My Plan on Taxes
Position statement of Chris Demers addressing the role of taxes in our democracy.
Americans hate paying taxes and hate the process. Government requires us to pay to support its operations and programs. But many believe government does not offer enough in return, does not spend wisely, and the process is overly complex. This causes distrust in government. Confidence is down and fewer people are filing taxes in recent years.
Here are my suggestions for greater fairness and transparency in our system of taxes:
Government should move toward a model of withholding all taxes and allowing taxpayers to confirm or reject that as their filing. They should not force Americans to complete and file a return. (no need for many Americans to be paying tax consultants).
A tax code simplification act should be passed with plan language that continues to use the same income categories and encourages use of a standard deduction checklist— that individuals can amend if they choose to file a return. (special interests should not be allowed to write this bill).
Federal income taxes should be reduced and progressive so earners making less than $100,000 pay no more than 10%, $200,000 pay no more than 20%, $300,000 pay no more than 30%, and no income level above that pays more than 35%. We want to encourage earned income.
All loopholes allowing tax avoidance should be eliminated. And the tax code should be reviewed each year for use of loopholes and those should be closed. A global treaty should end all tax havens and ability of companies and ultra rich to hide money.
Penalties for underpayment should be eliminated, including all penalties for underpayment of estimated taxes. (easier to do with a withholding model where responsibility lies with government).
There should be no forms of exempt income, except for retirement disbursements that were already taxed. Gifts and inheritance should be treated as ordinary (earned) income.
Payroll taxes should be applied to all levels of earned income, this includes Social Security Payroll tax.
Long term capital gains tax for securities held more than two years should be 30%, Long term capital gains for securities held more than a year and short of two years should be 40%, and securities held less than a year should be taxed at 50%. (capital gains must be taxed hire than earned income, especially short-term capital gains).
Production and consumption taxes should target companies and users that heavily deplete natural resources, bring harms to human health and the environment, and result in pollution and necessary cleanup. (money should be set aside for eventual mitigation and clean up).
Tax credits must exist that encourage savings and good financial behavior.
A wealth tax is not needed if these principles are followed. And there should be no alternative minimum tax.